Adequate funds for New South Wales LWU infrastructure restoration and investment could be raised by means of the issuance of debt instruments since this is not only already accepted practice in the United States, but it also generates sufficient levels of funding.
LWU's would be able to use this as a comparative rate when investigating the viability of alternative funding arrangements, such as securing finance from a financial institution.
We have sought to illustrate the feasibility of our scheme using the specific institutional context of New South Wales local government and the LWU business entities owned by New South Wales local councils and their need to raise $955 million to meet their reported infrastructure backlog.
In response to the findings of the Allan Inquiry (2006) in so far as they related to LWUs, the (then) Department of Energy, Utilities and Sustainability (DEUS) noted that the infrastructure renewal gap was in fact fully funded, since LWUs held investment and cash reserves of around $1.1billion to fund the renewal task.
In any event, DEUS explicitly called for LWUs to consider greater borrowings to fund capital investment (DEUS 2006).
In section 5 we propose the issuance of an asset-backed security by New South Wales LWUs, where the investor's claim is on the revenue stream of the LWUs.